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Why are women faring worse in today's labour market?

A major focus for comments on the latest labour market figures was the much bigger rise in unemployment for women compared with men. Of the 28,000 increase in unemployed by the ILO measure, 22,000 were accounted for by women, with the female unemployment rate rising to 7.7 per cent.

As ever, drawing any conclusions from a single quarter’s figures is unwise, especially for relatively small changes. The underlying story is in any case more complicated. Women also took the majority of new jobs created, but unemployment still went up because many more women are now actively seeking work. In contrast, men were exiting the labour market by becoming “economically inactive” (not in work or actively seeking work).

But an analysis of longer run changes shows the recovery has been very unusual – the vast majority of jobs gained have so far gone to men (72 per cent) comparing Jan-March 2010 and Nov-Jan 2012. This is much higher than in the 1990s recovery when around 50 per cent of the increase in jobs was for men.

The decline in public sector employment since 2010 must be part of the reason why women are doing worse than men, although it is frustratingly difficult to get statistics on the gender mix of jobs being lost. However, readily available figures for local authorities in England and Wales show that about 70 per cent of the jobs lost between the first quarter of 2010 and the third quarter of 2011 were held by women1. But other factors must be in play - public sector employment also declined in the 1980s and 1990s recoveries, yet overall women’s employment grew strongly.

An important difference from previous recoveries is that employment in the female dominated retail sector has failed to grow – supermarkets have created jobs but these have so far been offset by job losses elsewhere in retail. This is a temporary factor and we can expect overall job growth to resume in retailing as and when the recovery picks up speed.

However, there may also be an underlying generational shift, whereby men are taking more of the jobs that previously might have been taken mainly by women. For example, since the recession ended: women employed in administrative roles fell by 85,000 while men went up by 80,000; women employed in sales and customer service roles went down by 74,000, while men employed went up by 71,000; and men in personal services went up by 40,000 while female employment remained stable (all figures 2009Q4 to 2011Q4).

On the evidence so far, female employment growth in the lower half of the labour market is likely to be weaker than in past recoveries. The implication must also be that female unemployment will be higher and persist for longer than we have seen in the past.

However, it is not all gloom and doom. Female employment in higher value knowledge associated jobs such as managers, professionals, and associate professional and technical occupations has grown strongly, and at a faster rate than for men. This suggests that the growth of the knowledge economy is still helping to improve the labour market position of some women.

[1] Local Government Association, Public Sector Quarterly Employee survey.